Road-funding sales tax may continue



For political leaders, it is a bit of a Catch-22. Nobody likes potholes, and nobody likes more taxes. So how can governments fund road repair?

The half-cent sales tax Winona County began in 2017 helped its road-funding situation significantly, but county staff say roads are still deteriorating faster than they are being resurfaced. Some local leaders thought Minnesota Governor Tim Walz’s proposed gas tax increase would solve this problem for them, but that proposal failed in this spring’s legislative session, leaving local governments in more or less the same situation as before. So far, Winona County Board members are sticking with the sales tax they adopted in 2017 and steering clear of property tax increases for roads or raising fees on vehicle registration.

“With the half-cent sales tax that the board approved several years ago, we are much closer to holding our own. I would say that we are still falling behind in keeping our pavements in decent shape, but we are falling behind at a much slower pace than we would be otherwise,” Winona County Engineer Dave Kramer said of the overall state of county road repair funding. “I would say we are much closer to holding our own, but we are still backsliding.”

The half-cent sales tax has generated over $2 million a year in revenue for the county highway department, and the county has used that money to repair roads sooner and to make road improvements that would otherwise never happen — such as the widening of Goodview Road under construction right now. Still, Kramer’s department fields a lot of complaints. It is not unusual for county staff to explain that the road in question is not scheduled to be fixed for several years or that it is not even on the schedule at all.

With those complaints in mind, Kramer brought up the idea of adopting a wheelage tax with the county’s Road and Bridge Committee. A wheelage tax is a $10-$20 local tax on annual vehicle registrations to help fund road repairs. Fifty-three of Minnesota’s 87 counties have adopted a wheelage tax, including all of Winona County’s neighbors. Depending on how high the fee is set, it is estimated a wheelage tax would bring in $390,000-$780,000 in Winona County.

County Board members Marcia Ward and Steve Jacob — who sit on the Road and Bridge Committee — were not interested.

“I think we both feel bad enough to have imposed a half-cent sales tax,” Jacob stated. “It’s not my nature to tax and spend, and I feel like the half-cent sales tax is the only tax I’ve ever supported and largely because it really benefits the rural district I live in.” Jacob said that while the county does have roads in pretty bad shape, the sales tax has helped significantly. As for adding a wheelage tax, he said, “If we’re already getting some help and relief with the half-cent sales tax, I don’t want to pile on to the taxpayer by adding just another tax on top of it … I just don’t want to put the burden of both those taxes on the taxpayer.”

“We already pay really high tab fees in comparison [to other states],” Ward said of Minnesota. She noted that a wheelage tax would produce far less revenue than the sales tax has, and that, unlike the sales tax — which is paid by everyone who shops in Winona County — a wheelage tax would be paid exclusively by Winona County residents. “I have a lot more people using the roads and bridges other than Winona County taxpayers,” Ward said.

Winona County Board member Marie Kovecsi echoed Ward’s point. “The sales tax does raise more revenue, and, to me, it does seem more broadly based. Every shopper, even if they live in Wisconsin, pays that tax,” she noted. She, too, said she would be reluctant to add more local taxes for road repair.

Kovecsi cast a deciding vote with Ward and Jacob in the 3-2 decision to enact the local sales tax back in 2016. Winona County’s sales tax for road repair will continue until the County Board votes to end it. Jacob and Ward said they support continuing the sales tax, at least for now. Kovecsi said she was undecided. “I would say we need to evaluate it … We need to just keep looking at it, and not consider anything absolutely permanent,” she said, adding, “They are depending on it more and more, so that would make it kind of hard to take away.” When pressed on whether she would support continuing the sales tax in 2020, Kovecsi said, “We haven’t really gotten into our budget yet, so right now I don’t know.” The County Board will begin its 2020 budget discussions next month.


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